CB Moves Unlikely To Support Growth

We expect moves by the Latvian central bank to shore up growth will have little real impact on forestalling a slowdown in economic growth in 2012. The Bank of Latvia's decision on Thursday January 19 to cut reserve requirements to 2% from 3% on liabilities over two years and from 5% to 4% on all other liabilities has worked to ease interbank lending rates, with RIGIBOR largely falling across the board. The central bank also decided to keep the main policy rate, the refinancing rate on hold at 3.50% for the eleventh consecutive meeting.

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